News / Economy

IMF Lifts Suspension of Funds to Malawi

FILE - International Monetary Fund Managing Director Christine Lagarde is greeted by Malawi’s President, Joyce Banda, on arrival at Kamuzu Palace in Lilongwe on her three-day official visit to Malawi, Jan. 4, 2013.
FILE - International Monetary Fund Managing Director Christine Lagarde is greeted by Malawi’s President, Joyce Banda, on arrival at Kamuzu Palace in Lilongwe on her three-day official visit to Malawi, Jan. 4, 2013.
Lameck Masina
The International Monetary Fund has resolved to immediately disburse about $20 million in suspended funding to Malawi. The IMF imposed the suspension last October pending investigations of a scandal in which millions of dollars in public funds were looted from government coffers. Although government authorities are happy with the IMF’s change of heart, commentators warn that this does not necessarily mean all is well on the country’s economic front.
The decision to release the funds was made by the IMF at a meeting in Washington on Friday after an extended review of Malawi's finances.
IMF Deputy Managing Director and acting chair Naoyuki Shinohara said the funds were released because, “Malawi’s macroeconomic performance under the IMF-supported program has remained broadly satisfactory," and that policy reforms initiated in May of last year are showing positive results.
However, he acknowledged that the recent fraud and misappropriation of substantial amounts of public funds and the associated loss of financial aid have negatively affected the country's financial outlook.
Revelations of corruption led the country's key donors to withhold millions of dollars in budget support and to demand that the Malawi government investigate and prosecute those involved in stealing state funds.
Shinohara said that to restore confidence in the management of its economy, it will be important for the Malawi government to investigate the fraud thoroughly and address the weaknesses in public financial management exposed by the fraud.
Malawi’s finance minister, Maxwell Mkwezalamba, told a news conference in Blantyre that the release of the IMF funds will encourage other donors who have withheld aid to resume funding.
“This is a green light to our development partners to continue assisting us. And this becomes particularly important for the CABS, the Common Approach to Budgetary Support, that had decided to delay the disbursement of budget support on the account of the looting on government resources, so there is already indication that the CABS [donors] group will come forward to support Malawi,” said Mkwezalamba.
Mabvuto Bamusi, an economic and social commentator, said that despite the release of IMF funds, Malawi cannot be complacent.
“There is a lot of caution that needs to be taken, and one of the cautions is that the government at Lilongwe should avoid being overexcited and pretending that everything is back to normal because we still have scenario where the cost of living is still very high and that, cannot simply being addressed by the $20 million from the donor community,” said Bamusi.
Bamusi also said that unless the Malawi government addresses issues such as drug shortages in hospitals, dilapidated roads, and problems in the procurement of school materials, it still would be a fallacy to talk about economic normality.
He also pointed out that whether or not some of the other donors who withheld aid will release it is still uncertain; just because the IMF has done so does not guarantee anything.
Malawi is only four months away from general elections, and Bamusi thinks it likely many individual donors will take a wait and see approach.

You May Like

Tired of Waiting, South Africans Demand Change ‘Now’

With chronic poverty and lack of basic services largely fueling recent xenophobic attacks, many in Rainbow Nation say it’s time for government to act More

Challenges Ahead for China's Development Plans in Pakistan

Planned $46 billion in energy and infrastructure investments in Pakistan are aimed at transforming the country into a regional hub for trade and investment More

Audio 'Forbidden City' Revisits Little Known Era of Asian-American Entertainment

Little-known chapter of entertainment history captured in 80s documentary is revisited in new digitally remastered format and book More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Study: Insecticide Damaging Wild Bee Populationsi
April 24, 2015 10:13 PM
A popular but controversial type of insecticide is damaging important wild bee populations, according to a new study. VOA’s Steve Baragona has more.

Video Study: Insecticide Damaging Wild Bee Populations

A popular but controversial type of insecticide is damaging important wild bee populations, according to a new study. VOA’s Steve Baragona has more.

Video Data Servers Could Heat Private Homes

As every computer owner knows, when their machines run a complex program they get pretty hot. In fact, cooling the processors can be expensive, especially when you're dealing with huge banks of computer servers. But what if that energy could heat private homes? VOA’s George Putic reports that a Dutch energy firm aims to do just that.

Video Cinema That Crosses Borders Showcased at Tribeca Film Festival

Among the nearly 100 feature length films being shown at this year’s Tribeca Film Festival in New York City are more than 20 documentaries and features with international appeal, from a film about a Congolese businessman in China, to documentaries shot in Pakistan and diaspora communities in the U.S., to a poetic look at disaffected South African youth. VOA’s Carolyn Weaver has more.

Video UN Confronts Threat of Young Radicals

The radicalization and recruitment of young people into Islamist extremist groups has become a growing challenge for governments worldwide. On Thursday, the U.N. Security Council heard from experts on the issue, which has become a potent threat to international peace and security. VOA’s Margaret Besheer reports.

Video Growing Numbers of Turks Discover Armenian Ancestry

In a climate of improved tolerance, growing numbers of people in Turkey are discovering their grandmothers were Armenian. Hundreds of thousands of Armenians escaped the mass deportations and slaughter of the early 1900's by forced conversion to Islam. Or, Armenian children were taken in by Turkish families and assimilated. Now their stories are increasingly being heard. Dorian Jones reports from Istanbul that the revelations are viewed as an important step.

Video Migrants Trek Through Western Balkans to Reach EU

Migrants from Africa and other places are finding different routes into the European Union in search of a better life. The Associated Press followed one clandestine group to document their trek through the western Balkans to Hungary. Zlatica Hoke reports that the migrants started using that route about four years ago. Since then, it has become the second-most popular path into Western Europe, after the option of sailing from North Africa to Italy.

Video TIME Magazine Honors Activists, Pioneers Seen as Influential

TIME Magazine has released its list of celebrities, leaders and activists, whom it deems the world’s “most influential” in 2015. VOA's Ramon Taylor reports from New York.

Video US Businesses See Cuba as New Frontier

The Obama administration's opening toward Cuba is giving U.S. companies hope they'll be able to do business in Cuba despite the continuation of the U.S. economic embargo against the communist nation. Some American companies have been able to export some products to Cuba, but the recent lifting of Cuba's terrorism designation could relax other restrictions. As VOA's Daniela Schrier reports, corporate heavy hitters are lining up to head across the Florida Straits - though experts urge caution.

Video Kenya Launches Police Recruitment Drive After Terror Attacks

Kenya launched a major police recruitment drive this week as part of a large-scale effort to boost security following a recent spate of terror attacks. VOA’s Gabe Joselow reports that allegations of corruption in the process are raising old concerns about the integrity of Kenya’s security forces.

Video Japan, China in Race for Asia High-Speed Rail Projects

A lucrative competition is underway in Asia for billions of dollars in high-speed rail projects. Cambodia, India, Indonesia, Malaysia Thailand and Vietnam are among the countries planning to move onto the fast track. They are negotiating with Japan and the upstart Chinese who are locked in a duel to revolutionize transportation across Asia. VOA Correspondent Steve Herman in Bangkok has details.

Video Scientists: Mosquitoes Attracted By Our Genes

Some people always seem to get bitten by mosquitoes more than others. Now, scientists have proved that is really the case - and they say it’s all because of genes. It’s hoped the research might lead to new preventative treatments for diseases like malaria, as Henry Ridgwell reports from London.

Video Bible Museum Coming to Washington DC

Washington is the center of American political power and also home to some of the nation’s most visited museums. A new one that will showcase the Bible has skeptics questioning the motives of its conservative Christian funders. VOA religion correspondent Jerome Socolovsky reports.

Video Armenia and Politics of Word 'Genocide'

A century ago this April, hundreds of thousands of Armenians of the Turkish Ottoman empire were deported and massacred, and their culture erased from their traditional lands. While broadly accepted by the U.N. and at least 20 countries as “genocide”, the United States and Turkey have resisted using that word to describe the atrocities that stretched from 1915 to 1923. But Armenians have never forgotten.

Video Afghan First Lady Pledges No Roll Back on Women's Rights

Afghan First Lady Rula Ghani, named one of Time's 100 Most Influential, says women should take part in talks with Taliban. VOA's Rokhsar Azamee has more from Kabul.

Video New Brain Mapping Techniques Could Ease Chronic Pain

From Boulder, Colorado, Shelley Schlender reports that new methods for mapping pain in the brain are providing validation for chronic pain and might someday guide better treatment.

VOA Blogs

World Currencies


Rates may not be current.